Beach still crowd-pleaser

Resort: Despite higher prices and growing competition, Ocean City has held its own as a tourist destination this summer.

OCEAN CITY - The mother and daughter strolled past familiar boardwalk hotels and ice cream stands, then savored a few minutes of gazing at the kite-filled sky.

Pittsburgh native Janet Dempsey and her daughter, Debbie Hackwelder, had tried other beach resorts in summers past. This year, Ocean City lured them back.

"We've been here and will be here again," said Dempsey, whose family rented a condominium, drawn by the mix of accessible beaches and family friendliness they say is slipping away elsewhere. "We love it."

As the prime summer season winds down this Labor Day weekend, businesses in Maryland's beach resort are reporting a respectable - if not gangbusters - season, thanks largely to mostly dry, sunny weather. Hotel room tax revenue rose 7 percent in June, the latest month for which statistics were available, many hotels sold out on weekends in August and some restaurants wrapped up one of their best summers, tourism officials said.

Rising gas prices - which this week passed the $3-a-gallon mark at dozens of gas stations around the state - have yet to dampen business, said city officials, who expect a strong Labor Day weekend to close the season. But tourism officials are keeping an eye on rising gas prices, acknowledging it could affect future business.

Some resorts elsewhere in the country reported yesterday that people who had planned end-of-summer road trips were scrapping their plans in light of soaring gas prices and lengthening lines at the pump.

"People determined they were going to travel this summer anyway," said Michael Noah, Ocean City's director of tourism. "It's still cheaper to get in the car and come here than to travel farther away, even if they're coming from New Jersey or New York," the home states of a growing number of Ocean City's summer visitors.

The flow of visitors this season meant increased sales of beach chairs, towels and suntan lotion for Sunsations, a 14-chain beach merchandise retailer. The Carousel Hotel and Resort, on the beach at 117th Street, had its best-ever July and August. And sales jumped by double digits at The Galaxy Bar and Grille, a white-tablecloth restaurant on Coastal Highway and 66th Street.

"Every weekend since the start of the season has been great," said David Betts, Sunsations' controller. "With gas prices so high, many people are staying close to home, and for many people, close to home is Ocean City."

Weekend population estimates have been even with last summer, and haven't changed much in four years. Late August has become a particular challenge for many businesses as earlier school starts have forced families to head home sooner. And some merchants worry that the town's building binge could hurt business by pushing prices too high.

Merchants and officials say they have had to work on overdrive this year to hold onto longtime family vacationers being lured elsewhere. The town and individual businesses beefed up advertising budgets, devised new promotions and offered more bundled vacation packages to appeal to families seeking value.

Competition with other destinations, within and beyond Maryland's borders, is intensifying. And developers in Ocean City have been razing older restaurants, hotels and apartment houses to make way for high-priced, luxury condos, including many that are under construction or newly completed. It's a trend that some fear could transform the town's family-friendly and affordable image.

And some merchants said they're just not seeing the customer traffic of years past.

"Ocean City is pricing itself out of the market, with what the hotels are charging and the million-dollar condos," said Jen Wawrzeniak, an eight-year resident who worked in various restaurants before becoming a manager of MR Ducks apparel shop on the boardwalk at Somerset Street. "This summer didn't seem nearly as busy as in past years."

On the typically busy July 4th weekend, 322,308 people were in town, according to the town's population estimates, down from 328,413 a year earlier. Yet, weekend populations in June averaged 227,775, up from the 216,509 in June last year.

"We are surviving," said Axel Aksu, an owner since 2000 of North Pole Lemonade on the boardwalk. "Business is better every year. We get repeat customers."

Chris Trumpower, a co-owner with his brother Brad of The Galaxy Bar and Grille, said they have seen a double-digit percentage increase in sales this summer over last year, under a previous owner.

At the request of businesses, the city and Worcester County increased Ocean City's advertising budget by $250,000 this year, to $1.2 million, in part to take on the Outer Banks of North Carolina and the New Jersey shore in radio campaigns, Noah said. The campaigns sought to reach residents of those states who had never considered Ocean City, he said.

And for the first time this year, the town sponsored TV weather reports in nearby markets through July.